13 Sep Car Wash Lease Agreement
Another financing option for your car wash is the purchase of a lease. Here too, as with leasing, you pay certain fixed sums over a fixed period. However, ownership of the car wash is automatically transferred to you after the last tranche, and you pay VAT for the full price with the first tranche. Therefore, you should also indicate the washing station in your balance sheet. This allows you to apply for certain grants and subsidies. Leasing means that the lessor acquires a property (in this case the car wash) and leaves it for you for use, while remaining the property. What initially looks like rents has some peculiarities. A difference between leasing and renting is that as a tenant you are responsible, for example, for maintenance and repair as well as insurance. However, the purchase obviously has an impact on your creditworthiness and, in most cases, you need to invest a fairly large amount of your own capital. When it comes to leasing, the equity capital should not be as high as when it was purchased. The payments you have to pay are covered by the revenue from the washing station. Their amount is determined in advance and allows an accurate calculation over the entire duration of the contract. In addition, payments are immediately tax deductible.
Since ownership remains in the hands of the lessor, you are not required to account for the asset on the balance sheet and thus you can prove sustainable liquidity and credit quality.. . .